The modern end-of-the-world imagination often seeks out great Hollywood-style cataclysms: an asteroid collision, all-out nuclear war, a solar flare that wipes out the electrical grid, even a worldwide epidemic that leaves few alive. Less compelling is the possibility of relentlessly rising death rates that finally overwhelm birth rates and quietly set worldwide population on a downward path.

While such a development would (gruesomely) address population pressures over time, it would be both highly disruptive--the costs of coping would be very high compared to family planning--and also morally repugnant if allowed to occur through intentional neglect.

The idea that a decline could unfold in this manner, however, is so far from any policymaker's mind that it doesn't even seem to register. And, yet the seeds for it are being sown right now. As the world economy continues to sputter, government revenues fall. More and more nations are embracing fiscal austerity and public health budgets are being cut. The situation has become exceedingly dire for Greek citizens whose health care system is being slashed to meet austerity targets demanded by Eurozone lenders as the price for keeping the government financially afloat. Because many pharmacies have not received government payments for drugs they dispense in such a long time, these pharmacies are now demanding cash up front. And, impoverished Greeks are finding it difficult and often impossible to pay.

While money is one issue and an important one, complacency is another. The amazing triumphs over infectious diseases in the last century have led policymakers to ignore the realities: 1) The prevention of infectious diseases requires constant monitoring and preventive action and 2) the treatment of such diseases requires both the judicious use of existing drugs so as not to hasten resistance and the regular development of new drugs and therapies as infections agents evolve and gain resistance to existing drugs.

India is now the third country to report what is being called totally drug resistant tuberculosis. Part of the problem is poor disease management. Too often patients are given the wrong treatment regimen. But also more than 50 years have passed since new drugs designed to defeat TB were developed. Our success to date has been our undoing. It has not been all that profitable for drug companies to do the extensive research for a new drug to treat a disease that has been largely under control.

Perhaps the poster child for the collapse of the public health system is Russia where the breakup of the former Soviet empire led to major disruptions of public institutions including public health. A country in which AIDS is rampant as well as tuberculosis, Russia has experienced persistent population declines since the breakup. (I covered this previously in this piece written in 2010.)

Part of what makes public health spending a hard sell is that it simply cannot supply the kind of compelling narratives that such routine medical miracles as heart valve replacements and cochlear implants (which restore hearing in some deaf patients) are able to supply. Public health successes are about what doesn't happen, about people who don't get sick, epidemics that don't get out of control, about the healthy and problem-free delivery of newborns, about the birth defects that are avoided. (I've written on this problem several times, but especially applicable is a piece entitled "Asymmetrical accolades: Why preventing a crisis almost never makes you a hero.")

The notion to date is that cutbacks in public health are part of a broader but temporary austerity. But persistent strains on the world's oil supply suggest that the engine of global growth will no longer be cheap or plentiful. (All the hand waving about new discoveries and new extraction techniques aside, world oil supplies remain flat. The industry's cheerleaders and dupes conveniently forget to mention depletion which is constantly eating into the production capacity of existing fields by at least 4 to 5 percent per year.) That means growth will have to be fueled by some other energy source though it's not clear what that is. And, the financial headwinds of too much debt could mean that no matter what happens on the energy front, the world is stuck in low or no growth mode for another decade and possibly beyond.

That means waiting for growth to return and replenish government coffers so that governments can in turn increase public health budgets will open a long window of vulnerability--just when all factors suggest we will need increased public health vigilance. The gradual degradation of public health services will never make good Hollywood material. The trend is more in line with T.S. Eliot's ending of "The Hollow Men." The world may indeed end with a whimper, the whimper of souls expiring one by one for lack of appropriate public health measures--but at a rate that throws global society into a constant turmoil from which it will be difficult to recover.

Kurt Cobb is the author of the peak-oil-themed thriller, Prelude, and a columnist for the Paris-based science news site Scitizen. His work has also been featured on Energy Bulletin, The Oil Drum, 321energy, Common Dreams, Le Monde Diplomatique, EV World, and many other sites. He maintains a blog called Resource Insights.

Sunday, June 17, 2012

Psychologist Daniel Kahneman likes to pose the following problem to audiences to illustrate our habitual modes of thinking:

A bat and a ball cost $1.10 together and the bat costs one dollar more than the ball. How much does the ball cost?

It turns out that about 50 percent of students at the Massachusetts Institute of Technology got the answer wrong. The proportion reached as high as 90 percent at other unnamed universities. Okay, now that you've had time to reflect on the answer, you'll realize that your instinct was probably to answer 10 cents. But, of course, that's wrong. And, all you have to do is some elementary math to realize it's wrong, and then arrive at the correct answer: The ball costs 5 cents.

What's in operation here are two systems of interpreting the world, one associative and one logical, often referred to in psychology as System 1 and System 2, respectively. System 1 picks up the numbers $1.10 and $1 and makes an incorrect leap that the ball costs 10 cents. System 2 does the math and then corrects the error. It's something that happens every day in our lives. But, in this case what is at stake is regarded by most people as so trivial that even very smart ones fail to engage System 2 to check their answer. If, instead of being faced with a trivial problem that has no impact on your life, you were considering which house to buy, you would probably be engaging System 2 on a regular basis. You would be trying to determine if you were getting a fair price by, for example, checking home values nearby, comparing square footage and evaluating features such as a swimming pool or finished basement.

And, this brings me to my topic. Issues such as climate change and peak oil seem so abstract to most people that they do not see them as pressing issues that require a thorough analysis and immediate action. This is true because the effects are not immediately impinging on them or, at least, they are unable to connect what effects there are to themselves. And, the usual fact-filled analysis that is often thrown at them therefore doesn't interest them much. As it turns out, information that is new, but not consistent with one's current belief system, is normally discarded by most people. Typically, only some exceptional concrete change of circumstances will cause people to open their belief systems to contradictory information.

You might say System 1 is the storytelling function and System 2 is the investigatory, scientific function. To succeed, stories need to be concrete and evocative of experiences and feelings that people can identify with. Since we operate most of the time using System 1 and since it serves us well in the vast majority of cases, the conclusion we can draw is that climate change and peak oil activists must create a narrative that can simultaneously tap into people's existing belief systems while giving them new information. This is no small task. And, it would be hard enough without all the pernicious and omnipresent propaganda emitted by the fossil fuel industry. That propaganda, incidentally, tells stories that reinforce the status quo and so don't challenge the basic worldview of most people.

Last year the U.S. Congress saw fit to cut the budget of the U.S. Energy Information Administration (EIA) in the face of historically unprecedented oil prices that are telling us we need to keep careful track of energy markets and supplies. Again, the excuse was cost-cutting. It's less clear that this move was inspired by the desire to keep the public in the dark rather than by the ideologically driven desire to shrink government and make it ineffective.

North Carolina, of course, will simply be a laughingstock if it goes ahead with its plan to outlaw the truth about sea level rise. That information will still be available from other sources. But Canada's ocean contaminants program will mean the loss of vital data about the health of our oceans, especially about the Arctic Ocean. As for the EIA budget cuts, the information it will no longer compile could be compiled by others and made available for a fee. But the central purpose of the EIA is to make energy information available to policymakers and the public free of charge to encourage broad participation in debates about energy policy.

But the purging of facts doesn't always come from governments. Privately funded propaganda--these days coming from so-called "think tanks" that are funded by right-wing billionaires--can also obscure our view. If you want testimony from inside one of these think tanks, read this piece from conservative David Frum who was fired from such a think tank for disagreeing with Republicans on strategy--not even policy--during the debate over the Affordable Care Act. The message was clear: "We don't pay you to think. We pay you to repeat."

All of these moves by governments, corporate interests and elites are really aimed at cultivating and disseminating compelling stories which appeal to System 1 to reinforce the status quo. These moves are also designed to withdraw resources from government departments and drown out nonprofits that provide contradictory System 2 information which might be useful in checking the System 1 stories peddled by these groups.

The late Senator Daniel Patrick Moynihan once said, "Everyone is entitled to his own opinion, but not his own facts." Apparently, in the our new age of extremist ideologies, there is no longer any place for facts, only opinions.

P.S. I want to relate an encounter I had with an energy analyst from a highly regarded think tank, not a fake one, but a real one that does real consulting for corporations and government agencies. When I mentioned to him that the EIA reports that crude oil plus condensate (which is the definition of oil) has been flat since 2005, he responded that I couldn't be correct. I suggested that he look it up himself and see that production has bounced between 72 and 74 million barrels per day during that period. He stated that that number must not include tar sands production. I told him that it indeed includes all crude plus condensate from whatever source. But, he was simply not prepared to accept what the publicly available data told him.

There are three things I took from this conversation. First, I was frankly astonished that someone whose job is energy analyst at a bona fide think tank did not know the EIA number for crude oil plus condensate. After all, that's his job and that number is probably the most important number in the world for an energy analyst to know. Second, this person did not know the EIA definition of oil. I realize that this definition is not something the average person would know. But for someone who eats, drinks and breathes energy, it really ought to be essentially top of mind. Third, this encounter was a perfect illustration of how System 1 thinking--a broad narrative about there being plenty of oil for decades to come--can completely overshadow System 2 thinking even in persons whose work involves heavy emphasis on System 2.

UPDATE: One reader asked about the EIA definition of crude oil. The EIA has a glossary which defines oil as follows:

Crude oil: A mixture of hydrocarbons that exists in liquid phase in natural underground reservoirs and remains liquid at atmospheric pressure after passing through surface separating facilities. Depending upon the characteristics of the crude stream, it may also include 1. Small amounts of hydrocarbons that exist in gaseous phase in natural underground reservoirs but are liquid at atmospheric pressure after being recovered from oil well (casing head) gas in lease separators and are subsequently comingled with the crude stream without being separately measured. Lease condensate recovered as a liquid from natural gas wells in lease or field separation facilities and later mixed into the crude stream is also included; 2. Small amounts of nonhydrocarbons produced with the oil, such as sulfur and various metals; 3. Drip gases, and liquid hydrocarbons produced from tar sands, oil sands, gilsonite, and oil shale. (my emphasis)

Kurt Cobb is the author of the peak-oil-themed thriller, Prelude, and a columnist for the Paris-based science news site Scitizen. His work has also been featured on Energy Bulletin, The Oil Drum, 321energy, Common Dreams, Le Monde Diplomatique, EV World, and many other sites. He maintains a blog called Resource Insights.

Sunday, June 10, 2012

My apologies to Ray Stevens, writer of the 1970s hit "Everything Is Beautiful," the lyrics and title of which I've morphed into the title of this piece. But with that I note the perpetual bullishness of the financial industry in the face of what is really an ongoing debt deflation. Every incident, every turn of events is summarized by the industry as a "bullish development."

If the Greek government is getting loans to keep it running for another few months--until things get better, of course--that's bullish. If the Greek economy is about to collapse, if the Spanish banks are about to collapse, if Italian bond rates are about to skyrocket, all of these things are bullish, too, because, of course, the European Central Bank will have to ease in some way or the Germans will have to relent and agree to bail out the Greeks, the Spanish banks or the Italian bond market.

But, here is the point. Unprecedented government spending and central bank easing have led to an extremely tepid economic recovery when history would suggest that a strong, vibrant recovery should have occurred. Neither action is solving the underlying problem: too much debt. Now, to most neoclassically trained economists (which is virtually all economists these days), debt is absolutely no problem because, they will tell you, one person's debt is another person's asset. The two cancel each other out. Sounds nice, doesn't it?

But when there is too much debt, it means that people who have that debt are unable to service it, that is, they are unable to pay even the interest payments on it. Of course, not everyone who is indebted is in this situation. But it doesn't take everyone to create an ongoing debt deflation. Here's the simple way to think about it: Every debt must be resolved in one of two ways. Those carrying a debt will either pay it back or default, handing the lender a loss, sometimes partial, sometimes complete. Those who can are generally paying down their debt. Hence the contraction in private debt worldwide since 2008. Those who can't pay their debts are defaulting. This includes individuals, companies and countries.

But the global economy is entirely dependent on the continuous expansion of debt in order to grow spending and consumption. That's just the way we've set things up. And, the only substantial expansion of debt we've seen since 2008 is in government debt. Without it, we would already be in a deep worldwide depression. The expansion of government debt and the purchasing which resulted from it have counterbalanced the shrinkage in private debt so far. But this expansion has not led to a robust economy recovery.

There are two reasons, neither of them bullish, for this result. First, it will take years for private debtors, both household and corporate, to bring down their debt (either by paying debts off or defaulting) to a level that would make them feel comfortable with expanding their debt again. Until they do, the economy will remain sluggish at best. But it will only remain sluggish--instead of falling off a cliff--if huge government spending and central bank easing continues. Governments around the world have probably reached the limit of what they can do without destroying their finances. And, in fact, a few already have destroyed them and more probably will.

As for central bank easing, with short-term interest rates hugging zero in major countries around the world, interest rates cannot go lower. Central banks could continue to buy dodgy collateral such as home mortgages or better quality collateral such as government bonds. This would provide more funds to the financial system meaning more cheap money made available for private borrowers. But few private borrowers see a reason to borrow. Either they are too indebted already and so banks will not lend to them or they are capable of borrowing, but see no reason to borrow. Businesses, for example, see little reason to expand in the face of continuing economic weaknesses, so they borrow very little. Individuals who can borrow are choosing not to because they are concerned about job security in such a weak economy.

The second reason for ongoing economic weakness is high oil prices. I've been wondering when $100 oil prices would finally place enough stress on the world economy to create weakness and even outright contraction. With the recent rapid decline in oil consumption and prices--indicative of economic softness--I think that weakness has finally arrived.

Even if the world's governments and central banks manage to avoid a catastrophe this time, high energy prices and two much debt will continue to bedevil the global economy for years to come. World oil production has been on a plateau since 2005 and shows no signs of growing despite all the hand waving about new tight oil production (often referred to misleadingly as shale oil). Production declines from existing fields continue to equal growth from new fields. Hence the oil production plateau.

While it is conceivable to me that in the next decade the world will achieve marginal gains in petroleum production (as distinct from so-called total liquids which include natural gas liquids and biofuels), I do not believe those gains can return us to an era of cheap oil. That means the path to resolution of our current economic woes rests with debt reduction. The problem could be resolved more quickly if there were a coordinated worldwide debt forgiveness on a very large scale. But rich people own that debt, and they appear to control most of the world's governments. Don't look for them to agree to a debt jubilee. Instead, the economy will likely limp along for another decade or so while people continue to retrench, paying down debt or defaulting when they cannot pay.

The result will be continuing high unemployment, social unrest and wildly gyrating markets. There is a better path. But, we will not take it as long as we are deluded into thinking that we can grow again as we did when oil was cheap and that the key to ending this slump is to add more debt.

Kurt Cobb is the author of the peak-oil-themed thriller, Prelude, and a columnist for the Paris-based science news site Scitizen. His work has also been featured on Energy Bulletin, The Oil Drum, 321energy, Common Dreams, Le Monde Diplomatique, EV World, and many other sites. He maintains a blog called Resource Insights.

Sunday, June 03, 2012

Modern agriculture and modern medicine go hand in hand. And, perhaps one of the best-known ways they interact is the use of antibiotics. If we humans get an external infection, we can now easily reach for topical antibiotics to kill the infection without harming ourselves. And, of course, we can take oral or injected antibiotics for internal infections.

In agriculture, antibiotics are used on livestock, in part because the drugs enhance growth and in part to prevent disease in close conditions typified by confined animal feeding operations, known as CAFOs--in which animals live so crammed together that they are constantly exposed to an array of infectious agents.

That's the medical model applied to animal agriculture. But the same model is being applied to crops. In the medical model pathogens identified as the cause of a disease must be eliminated. Of course, there are plant diseases. But they tend to be treated through a much more wholistic approach than human and animal disease. The emphasis is put on prevention since treatment, once a plant is infected, is very difficult. So, the general approach to plant diseases doesn't exactly fit the medical model.

Instead, if we look to the farm field as the subject to be diagnosed and treated, we can see right away what is considered an infection: weeds. Weeds are considered the equivalent of pathogens in the farm field, something that must be eliminated because they drain the vitality (i.e., lower the yield) of the crops in question.

And, this is where a parallel problem is arising. The genetically engineered crops of the 1990s were designed to allow herbicides to be used for chemical weeding while the crop is growing since the crop itself is genetically engineered with resistance to the weedkiller. The most popular combination has been Ready Roundup soybeans and Ready Roundup herbicide.

In the same manner, drug companies have developed new antibiotics through the years to combat the resistance problem. But at least they were developing new drugs. In the case of Dow Chemical and the Monsanto Company, the leading producer of genetically modified seeds, both are reaching back to the past. And, this points up a very interesting disconnect between the path of the drugmakers and that of the agricultural chemical manufacturers and seed developers (which are usually one and the same). Herbicides appear to be a tougher sell to regulatory authorities than genetically modified crops which--so long as they do not act as a "pest" themselves--sail to approval under the doctrine that they are "substantially equivalent" to other crops. Of course, such crops aren't pests themselves; they just create new kinds of weeds that become a giant headache for everyone else.

The point here is that the agricultural chemical and seed producers are not developing new weedkillers which would require enormous research, regulatory approval and then capital expenditures to build the necessary factories. They are taking the easier route of implanting resistance to their existing herbicides into crops. So you can forget about a new generation of herbicides that might be less toxic or quicker to break down in the environment.

Of course, this war on weeds is one that we cannot win. Weeds in a farm field are not an infection. They are part of natural succession, and farming, as ecologist William Catton Jr. once said, is "a war against succession." (Succession, you'll recall, is the progression of any ecosystem toward its climax or stable state.) There are many better ways to control weeds on the farm including crop rotation and the planting of cover crops. Neither have the deleterious effects of the relentless chemical applications central to the war on weeds.

But that approach wouldn't enrich the agricultural chemical giants who figure they can make quite a bit of money--while pushing the costs off onto others--between now and the time they and their allies in the farming community lose this pointless war.

Kurt Cobb is the author of the peak-oil-themed thriller, Prelude, and a columnist for the Paris-based science news site Scitizen. His work has also been featured on Energy Bulletin, The Oil Drum, 321energy, Common Dreams, Le Monde Diplomatique, EV World, and many other sites. He maintains a blog called Resource Insights.